Question

What do reinsurers on higher surpluses and on facultative reinsurance examine?

a.

Adequacy of rate levels

b.

Underwriting data and particulars of rates

c.

Risk improvements and rates

d.

All of the above

Posted under IC85 Reinsurance Management

Answer: (d).All of the above Explanation:Reinsurers on higher surpluses and on facultative reinsurance examine the adequacy of rate levels, underwriting data and particulars of rates, as well as risk improvements and rates. When considering a facultative offer, reinsurers ask for detailed underwriting data and particulars of rates, and in the placement of the top surplus, selection of the reinsurer requires a great deal of care, and not only should the reinsurer be financially sound but he should also be known for his reasonableness and promptness. The expertise and knowledge of markets which the brokers possess is very useful in placing such surpluses. Furthermore, in some of the underdeveloped markets, reinsurers or brokers even inspect the risks themselves and advise on risk improvements, rates, etc. Hence, the correct answer is d, all of the above.

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Q. What do reinsurers on higher surpluses and on facultative reinsurance examine?
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